Donnerstag, 26. September 2013

On
28 February 2013, the Parliament of the Republic of Tajikistan enacted
the Law “On the Investment Agreement”. The Law was signed by the
President on 14 March 2013. The Law provides for rules on investment
contracts between the Government of Tajikistan and investors for
investment projects of a “strategic” character. Such contracts are to be
signed by the Government of the Republic of Tajikistan and ratified by
the Parliament (Art. 12 and 13 respectively). The contract may establish
rules, which are not provided for under the legislation of Tajikistan,
as well as a strong grandfathering clause (Art. 6 sec. 3 of the Law). The ratification of such contracts by the Parliament
elevates the special contractual regime to the level of formal
legislation with a character of lex specialis. The Law
foresees the possibility to agree on a very broad arbitration clause
covering all disputes out of the investment contract, also in public
matters (Art. 21 Sec. 2 of the Law). Tajikistan can give its consent to
waive its state immunity including immunity against enforcement of arbitral awards.

The
above-mentioned provisions are just examples from a long list of
concessions made by Tajikistan to investors. Legislation providing for
the internationalization of contracts, restrictions on sovereign rights
and state immunity waivers was typical for the investment legislation of
developing countries in the 1960-70s (e.g. Indonesia) and also for some
post-Soviet countries in the early 1990s (e.g. Azerbaijan, Kazakhstan).
The experience of these countries shows that extensive restrictions of
sovereign rights very often sooner or later lead to disputes with
investors. The State needs at least the right to react to changes of
external circumstances and to adapt its legal framework. Investors are
often not interested in such amendments and make use of the rights given
to them by the State (e.g. under the grandfather clause).

The
above-mentioned Law was drafted with the support of the International
Finance Corporation. Probably many other international experts and
organizations (e.g. UNCTAD) would advise Tajikistan to drop or at least
to amend some of the provisions of this Law.

Donnerstag, 5. September 2013

On 3 September 2013, the President
of Armenia Mr. Serzh Sargsyan said at a meeting with the
Russian President Mr. Vladimir Putin that Armenia would join the Customs Union
of Russia, Kazakhstan and Belarus. On the one side, this can
be regarded as a reasonable step as Russia is probably the main trading partner
of Armenia, and joining the Customs Union could encourage Armenia’s foreign
trade activities. However, Armenia has just finished negotiations of an
Association Agreement with the EU including a DCFTA Agreement. The latter has
been announced to be initialed at the EU Summit in Vilnius in late November
2013. The problem is that in such
a case Armenia would be in an FTA with the EU and at the same time a member of
a customs union with non-WTO members, in which a big part of national foreign
trade competencies is delegated to the customs union bodies. This combination
seems to be impossible, at least as of now. Does it mean that there will be no
DCFTA initialing with Armenia in Vilnius?

Montag, 2. September 2013

The second
half of August 2013 was not easy for Ukrainian trade with Russia: the latter
has suddenly started to apply very strict control measures for Ukrainian goods
at the Ukrainian-Russian border. As a result, thousands of tons of goods stood
at the border and waited for completion of customs administration procedures. Some
Ukrainian sources called this “an economic war against Ukraine”, but both
Russian and Ukrainian officials said it was just a difficult situation with
customs administration. The situation was deescalated after political contacts
at the highest level had taken place. It is reported that the customs is
working in a normal regime, also for Ukrainian goods.

A little
bit earlier, the production of a big Ukrainian candy producer was tested and
prohibited for sale in Russia (as tests indicated that there were dangerous
substances in the sweets).There were
also other disputes between Russia and Ukraine earlier this year.

Many
experts believe that Russia wanted to show Ukraine that it could lose the big
Russian market if it did not pursue its cooperation with the Customs Union (of
Belarus, Kazakhstan, and Russia) and instead strengthened cooperation with the
EU. The best position for Ukraine would be to intensify cooperation with both
trade partners. This, however, seems not to be easy: if Ukraine joined the
Customs Union, an EU-Ukraine Association Agreement with DCFTA would not be
possible. Will Ukraine be able to balance these interests?